IOWA CITY — With the tax filing season now underway, a University of Iowa accounting professor suggests America adopt what’s being done in many European countries, where the government prepares your taxes for you — for free.
Professor Ryan Wilson says our current electronic filing process is automated, so it wouldn’t be a great stretch for the IRS to go the next step and prepare our taxes, too. “The government already has most information that they need to pre-populate tax returns for most citizens,” Wilson says. “If individuals had more complex investments, they could always opt out of the pre-populated return and do their own taxes, but I think for the majority of Americans, it would just reduce anxiety, save a lot of time, and save a lot of money.”
Wilson says a program called ReadyReturn is already being used in nations including the UK, Denmark, Sweden, and Spain, where the government prepares its citizens’ taxes. He says the program is simple and it’s successful. “They send you a completed return and if you’re in agreement with the return, then you can sign it and send it back,” Wilson says. “It’s different in each country, but there’s always a mechanism to challenge or try to correct something that you don’t agree with, but if you’re in agreement with what’s reported, in some countries, you can even just text back. You get a text from the government and if you text back ‘YES,’ then you’re done.”
Many Americans have a healthy skepticism of the federal government, but Wilson thinks people would come around to loving the concept of having the taxing task of tax preparation handled by Uncle Sam, especially if it’s free. “Oh, yeah, I do, I really do,” Wilson says. “I think that as long as you had the option to opt out, and that was perfectly legal, and you had a clear mechanism for challenging anything, I think people would look back in 10 years and wonder what in the world we’re doing, spending half of an afternoon or a whole day trying to trying to file your own return.”
As we saw during the pandemic with the vaccine and mask debates, there’s a large segment of the population that will question everything that comes from Washington DC. While those people they may never trust the I-R-S to do their taxes for them, Wilson believes this is a winning idea. “You’d be able to verify all the information, since you have your own W-2s, you have all your tax documents from your employer, 10-99s and so on, so you should be able to cross-check what is on the pre-filed return,” Wilson says, “but yeah, I understand there could be some skepticism, I suppose.”
The deadline to file our federal tax returns is April 15th, while state taxes are due April 30th.